Nucor Corporation Case Study: Historical Financial Analysis (Case Study Sample)

Nucor Corporation Case Study: Historical Financial Analysis Student’s Name Institutional Affiliation Date: Historical Financial Analysis Introduction Nucor Corporation, a leading steel and steel products manufacturer, has been navigating through dynamic market conditions while striving to enhance its market share and profitability over decades. To achieve such objectives, it remains critical for the company to analyze its historical financial data to inform its strategic plan. Notably, historical financial analysis involves evaluating a company’s financial statements to determine its profitability, viability, and stability in the business environment ADDIN CSL_CITATION {"citationItems":[{"id":"ITEM-1","itemData":{"DOI":"10.36348/sjef.2020.v04i01.005","ISSN":"25239414","abstract":"This research was conducted with the aim of: 1) To analyze the effect of working capital turnover on profitability; 2) To analyze the effect of liquidity on profitability; 3) To analyze the effect of leverage on profitability. This type of research used in this study is casual associative research (causal associative research). The population of this research are property, real estate, and building construction companies which are included in the Kompas 100 index which are listed on the Indonesia Stock Exchange (IDX) in the period 2013-2018. The sampling technique is using purposive sampling technique. The analytical method used to test hypotheses is multiple regression analysis. The results of the study show that: 1) Working capital turnover has no effect on profitability; 2) Liquidity has no effect on profitability; and 3) Leverage has a negative effect on profitability.","author":[{"dropping-particle":"","family":"Bintara","given":"Rista","non-dropping-particle":"","parse-names":false,"suffix":""}],"container-title":"Saudi Journal of Economics and Finance","id":"ITEM-1","issue":"01","issued":{"date-parts":[["2020"]]},"page":"28-35","title":"The Effect of Working Capital, Liquidity and Leverage on Profitability","type":"article-journal","volume":"04"},"uris":["http://www.mendeley.com/documents/?uuid=d35c37ce-85f9-4308-8565-d8f292463c1a"]}],"mendeley":{"formattedCitation":"(Bintara, 2020)","plainTextFormattedCitation":"(Bintara, 2020)","previouslyFormattedCitation":"(Bintara, 2020)"},"properties":{"noteIndex":0},"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"}(Bintara, 2020). Data obtained from historical finances helps the executive leaders make informed decisions, identify the company’s strengths and weaknesses, manage risks, secure finance, establish and execute strategic plans, and financial planning, and improve the company’s efficiency and transparency ADDIN CSL_CITATION {"citationItems":[{"id":"ITEM-1","itemData":{"author":[{"dropping-particle":"","family":"Anjum","given":"Sanobar","non-dropping-particle":"","parse-names":false,"suffix":""}],"container-title":"International Journal of Research in Commerce & Management","id":"ITEM-1","issue":"8","issued":{"date-parts":[["2010"]]},"page":"126-131","title":"An Overview of Financial Ratios from 1900 ' s Till Present Days","type":"article-journal","volume":"1"},"uris":["http://www.mendeley.com/documents/?uuid=adcdc434-bb1e-4780-82a2-b39d293818e4"]}],"mendeley":{"formattedCitation":"(Anjum, 2010)","plainTextFormattedCitation":"(Anjum, 2010)","previouslyFormattedCitation":"(Anjum, 2010)"},"properties":{"noteIndex":0},"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"}(Anjum, 2010). This paper includes a comprehensive financial analysis of Nucor Corporation, comparing its performance to its primary competitor, ArcelorMittal, and industry benchmarks. By using key financial metrics, assessing strategic choices, and identifying areas of strength and weakness, this analysis aims to provide insights into Nucor's financial position and strategic direction. Historical Financial Statements Nucor Corporation's financial statements, including the income statement, balance Sheet, and cash flow statement for the three most recent years are highlighted in appendices 1, 2, and 3. Appendix 1 regards the company’s income statement, while Appendix 2 regards the company balance sheet, and Appendix 3 details the company’s cash flow statement for the 2017, 2018, and 2019 financial years. The aforementioned appendices also include an analysis that highlights horizontal and vertical changes for each line item for the 3 most current years. Ratios Nucor Corporation's various ratios, including profitability, liquidity, leverage, activity, and price-to-earnings ratios are calculated and presented in Appendix 4. Competitor ratios were also calculated and presented in Appendix 5. Changes between the 3 most recent years are also highlighted.  Financial Analysis Narrative The massive growth of the global steel industry is directly attributed to the growth of industries such as real estate, transport, and automotive, among others that highly utilizes steel ADDIN CSL_CITATION {"citationItems":[{"id":"ITEM-1","itemData":{"abstract":"the current health of the steel industy,admis a contextt of global excess steelmaking capacity. this paper shows that, notwithstanding considerable firm level heterogeneity, the steel industy's financial situation is on average weaker than it has been in years, worse than during the last steel crisis of the late 1990s.","author":[{"dropping-particle":"","family":"Filipe","given":"Silva","non-dropping-particle":"","parse-names":false,"suffix":""}],"container-title":"Evalutating the Financial Health of the Steel Industry","id":"ITEM-1","issue":"2015","issued":{"date-parts":[["2017"]]},"page":"1-40","title":"Evaluating the financial health of the steel industry","type":"article-journal","volume":"31"},"uris":["http://www.mendeley.com/documents/?uuid=060f8986-d635-491a-ab46-14ca5b83d5f1"]}],"mendeley":{"formattedCitation":"(Filipe, 2017)","plainTextFormattedCitation":"(Filipe, 2017)","previouslyFormattedCitation":"(Filipe, 2017)"},"properties":{"noteIndex":0},"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"}(Filipe, 2017). The steel industry has become highly competitive as new firms enter the steel industry and large multinational companies expand to international markets, pushing the previously oligopolistic steel industry to monopolistic competition. As evident in Nucor Corporation and ArcelorMittal financial ratios highlighted in the appendices, there are limited differences among companies in the steel industry.  Nucor Corporation's financial performance over the past years reflects its resilience to success despite volatile market conditions. The company experienced fluctuations in net sales from 2017 to 2018, with an increase of 24% in 2018 followed by a 10% decline in 2019. Several factors could have contributed to this decline, including fluctuations in steel prices, changes in demand, or global economic conditions, among others ADDIN CSL_CITATION {"citationItems":[{"id":"ITEM-1","itemData":{"abstract":"the current health of the steel industy,admis a contextt of global excess steelmaking capacity. this paper shows that, notwithstanding considerable firm level heterogeneity, the steel industy's financial situation is on average weaker than it has been in years, worse than during the last steel crisis of the late 1990s.","author":[{"dropping-particle":"","family":"Filipe","given":"Silva","non-dropping-particle":"","parse-names":false,"suffix":""}],"container-title":"Evalutating the Financial Health of the Steel Industry","id":"ITEM-1","issue":"2015","issued":{"date-parts":[["2017"]]},"page":"1-40","title":"Evaluating the financial health of the steel industry","type":"article-journal","volume":"31"},"uris":["http://www.mendeley.com/documents/?uuid=060f8986-d635-491a-ab46-14ca5b83d5f1"]},{"id":"ITEM-2","itemData":{"DOI":"10.1016/j.jclepro.2015.10.014","ISSN":"09596526","abstract":"This study develops and demonstrates a bounding methodology to quantify uncertainty in life cycle inventory (LCI) results arising from lack of detailed information on constituent materials. The method starts with the observation that the LCI of a material can change significantly with different attributes such as country of origin and recycled content, information often not specified in available bill-of-materials data. This lack of detailed information can be mapped to numerical bounds for LCI results. We demonstrate this idea via a case study of the contribution of steel manufacturing to the cumulative energy demand (CED) and life cycle global warming potential (GWP) of residential buildings. If steel type, recycled content and country of origin are all unknown, life cycle CO2-equivalent emissions of steel can vary from.7 to 5.9 kg CO2eq/kg. When used in compiling an LCI of a building, this wide range leads to overlapping results in a comparison of life cycle GWP impact between steel- A nd concrete-framed buildings. That is, without knowledge of the particulars of steel used, life cycle assessment (LCA) cannot distinguish between the two building types. In contrast, with knowledge that the steel is low or un-alloyed, produced in the U.S., and has greater than 60% recycled content, uncertainty bounds are reduced to.8-1.4 kg CO2eq/kg steel. With this range, the net impact of concrete-framed buildings is unambiguously larger than steel-framed residences. While demonstrated here for steel manufacturing, this bounding approach is broadly applicable in LCA.","author":[{"dropping-particle":"","family":"Bawden","given":"Kim R.","non-dropping-particle":"","parse-names":false,"suffix":""},{"dropping-particle":"","family":"Williams","given":"Eric D.","non-dropping-particle":"","parse-names":false,"suffix":""},{"dropping-particle":"","family":"Babbitt","given":"Callie W.","non-dropping-particle":"","parse-names":false,"suffix":""}],"container-title":"Journal of Clea...